As the government seeks a radical transformation in how it transmits Rs 3,00,000 crore of annual welfare spends, a lot rests on the shoulders of former Infosys CEO Nandan Nilekani. As the chairman of the Unique Identification Authority of India (UIDAI), he has to assign unique identity numbers for all Indians before a new subsidy regime of direct cash transfers can take off.

But the UIDAI has run into its first spell of rough weather in recent weeks. The finance ministry has rejected its Rs 15,000 crore demand to capture biometrics of 1.2 billion residents through its registrars, citing duplication of expenditure as the census office is also doing this for the National Population Register (NPR). The Planning Commission, accountable to Parliament for the UIDAI's expenditure, has said the authority's structure goes against government procedures.

In a freewheeling chat with Team ET , Nandan Nilekani sought to set the record straight about the controversies swirling around the UIDAI 's operations. He has asserted that the UIDAI is accountable to Parliament, follows all government procedures and is flexible about which agency collects the biometrics of all 1.2 billion Indians. The full transcript of the interaction...

ET: You have permission for enrollments upto 200 million people as of now. So will the Census office that is building the National Population Register (NPR) do the other billion?

Nandan Nilekani: No, no... What we really do is the technology-led backend activity. The enrolment at the front-end is done through our partners. We have around 50 active registrars like state govqernments, banks, LIC, oil companies and so on.

We reimburse these registrars at the rate of Rs 50 per head. So if a state government enrols one crore people we will pay them 50 crore and they in turn competitively give it to some enrolling agencies. So when we say we can enrol up to 200 million, (it means that) the multiple registrars of UIDAI can enroll up to 200 million people for which reimbursement will be given.

The matter (of whether NPR or UIDAI should do the biometrics) is in front of the cabinet. For the backend, there is no issue because whether the data comes to us from NPR or from our other registrars. What is in question is only whether beyond 200 million, whether we can reimburse registrars at Rs 50.

ET: If the cabinet decides that NPR will do enrolments, is it not a setback to the UIDAI project?

Nandan Nilekani: Our desire is 1.2 billion Indians get a number as soon as possible, so that the applications can roll out. That is all I care about.

ET: How did this question of overlap with the NPR arise?

Nandan Nilekani: The issue has been there from the beginning. When we were ready with this technology, the cabinet last May gave us permission to enroll up to 100 million people, pending the data coming from the NPR. A committee was set up to converge the two (NPR and UIDAI). That committee is giving its report now. I do not want to discuss what it is saying but fundamentally the CC-UIDAI will look at it for the future.

Nandan Nilekani: What we said was let us go with the multiple registrar model upto the extent we need it. We said we will have a system of convergence where you get your number with an Aadhaar registrar or any other, we will ensure non-duplication. Their view was stop at 200 million and thereafter, let the government take a view on how it will be done. So there's nothing – the difference between what they are approving and what we asked is one billion enrollments.

ET: You have proposed issuing 600 million Aadhaar numbers by 2014. Would that be impacted if NPR did the job?

Nandan Nilekani: The Registrar General of India, as far as I know, has a plan to enroll a few hundred million very quickly. So I am sure we will meet or exceed that.

ET: What prompted you to push for multiple registrars to do the entire population's biometric capture?

Nandan Nilekani: No, no... When we said let's do 1.2 billion, we didn't say we will do 1.2 billion. It was a variable thing. As long as the biometrics came from somewhere, it was fine with us. So the idea was only to go to that much which was the shortfall from other sources. So it was not that we would do the whole thing. It was more variable. Since you seem to have looked at all the documents, you might want to look at our proposal to the EFC. It was a variable thing.